Snowy Hydro has hit back at claims a critical tunnel boring machine has broken down further delaying Australia’s largest pumped hydro project.

The claims come as the energy company prepares to release a revised cost estimate and timetable for ‘Snowy Two’ after years in which the project’s original forecasts have repeatedly blown out.

WATCH THE FULL EPISODE BELOW: The billion-dollar project Australia can’t afford

Know the news with the 7NEWS app: Download today

A report in The Australian suggests Tunnel Boring Machine (TBM) ‘Florence’, which is excavating the project’s 17km headrace tunnel, ‘has been stalled deep underground for more than three months.’

A spokesman for Snowy Hydro has acknowledged in a statement to 7NEWS that Florence has been idle since mid-July, but for ‘planned maintenance’ and ‘refurbishment works on its cutterhead’.

The work on the giant boring machine “is expected to conclude by mid-October, after which tunnelling will resume.”

Snowy Hydro says Florence is 49 per cent of the way through its journey to complete the headrace tunnel.

Initially expected to cost $2 billion dollars to build, Snowy Two has long since blown its budget.

The current costing is $12 billion, but the company plans to make a new estimate public within weeks. There is speculation the project cost will climb to about $20 billion.

Critical to the calculation is the performance of the tunnel boring machines.

In an interview with 7NEWS podcast The Issue, Snowy Hydro CEO Dennis Barnes acknowledges that the fickle business of boring through mountains could cruel even the new cost estimate.

“We’re building a power station in the middle of a mountain with 40km of tunnel,” he said. “And it’s been bloody hard, I can assure you.”

Barnes is especially nervous about an 800m underground stretch known as the ‘Long Plain Fault Zone’, through which one of the TBMs — ‘Monica’ — must bore Snowy Two’s headrace tunnel, in mid-2027.

“If you really stick a tunnel boring machine and the mountain squeezes in on the tunnel boring machine, then that could be months or years to unstick,” he said.

“(We’re) going through the geological fault that created the Snowy Mountains. And until we really get into it, we won’t know. So, yeah, there are nerves associated with that.”

With costs rising and threats ahead, critics are circling.

“Cancel it. Cut our losses,” One Nation’s Pauline Hanson recently told the National Press Club.

Snowy Two, she says, is “nothing more than a black hole of debt for taxpayers.”

Barnes agrees it’s costly — until it is compared with any of the alternatives.

A renewable firmed grid backed by pumped hydro is ‘just wildly less expensive than nuclear,’ he says, comparing the current plan with the option favoured by One Nation.

A huge amount of money rests on Barnes and his team keeping their TBMs boring through the Snowys, but if he’s right, the fraught business of tunnelling is part of the cheapest option for powering Australia.